In China, “from the cradle to the grave” was not just a slogan, it was a political program. Health care was one of its cornerstones, locked in the egalitarian state ideology. The level of quality of the effort was light years behind the Scandinavian model, but it guaranteed survival – through free medical care – to an extremely poor country. The last 35 years of reforms have made that system ancient history, replacing it with a series of improved solutions. They are aimed at containing expenditure, improving services provided, and at rationalizing operations. As it transitions from an ideological level to a more pragmatic one, the entire apparatus is in need of continuous revisions imposed by a society that is much more dynamic than in the past. Today, reforming the Chinese healthcare system is a crucial challenge, maybe China’s most important. A radical attempt was made in 2009 to correct the imbalances of the system that were threatening to create dangerous tensions. The reforms of the 1980’s delegated the healthcare system to the individual provinces while cutting central government funding, and so the provinces had to fund it themselves. The result was a massive increase of costs for the people, who found themselves without basic care. This led to the creation of an unprecedented structure, where the ownership of the system is public but the management is private, and at times it was applied in the most merciless ways towards the poor. Adding to the social inequality are the territorial differences, as the wealthier coastal provinces can count on tax revenue to finance their healthcare systems and the interior is left with fewer resources and a dwindling workforce. The poorer regions found their funding by parceling out land that was often designated as residential zoning by unscrupulous methods, which resulted in numerous hospitals often expensive and useless but still able to generate a profit. Another blow to the reforms was delivered by incompetence and corruption: the inability to manage new situations, the denial of foreign insurers, and the protection of personal interests and shortcuts to easy profits. This situation led to the massive reforms of 2009, an attempt to free up resources for domestic consumer spending by making healthcare more affordable. Now the entire population enjoys at least basic coverage, although personal expenses for higher quality care have gone up and a shadow still lingers over the management of the system. China is essentially unable to satisfy the basic needs of its population, even though it was perfectly capable of creating them. Despite the improvements, the Chinese are worried on one hand and unsatisfied on the other. How to gain resources without falling into the contradictions of decades past? It is a task of optimizing a system built on a weak foundation. The situation demands a complex solution for complex requirements. China’s population is aging and in need of specific long-term care, at a time when the caretakers themselves are also getting old. They need modern equipment in an efficient system that is unfortunately a long time from realization. The amount of different medicines should be reduced through forceful negotiations with pharmaceutical companies. There is also a need for change in the managerial class, often left to officials and bureaucrats with no training, a luxury that China can no longer afford.

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About Alberto

Alberto Forchielli, born in 1955, received an MBA with honors from Harvard Business School and a bachelor’s cum laude in Economics from the University of Bologna. He is a founding partner of Mandarin Capital Partners, and the founder and president of Osservatorio Asia, a non-profit research center focused on Asia. He is also the founder of T-Island, a consultancy agency specialized in international relocations for professionals. In addition, he guided the expansion of the Roland Berger Foundation to Italy, which provides individual support for talented students lacking means to further their educations.